Drawing aside the curtains

Facing sunshine and breathing in sweet breeze, reminded myself of our free will to do what I really want, and I'm alive now, and here.

Under construction for some new stuff

I have no idea exactly what I will do here,
but it's gonna be some interesting, I guess.

Team blog: Wal-mart Summary

Here
Thank you everybody.

Wrapping up of blogworks..

Just some simple sumup
Team Post#3:Example of the expansion.
Team Post#2: Technical viewpoint
Team Post#1: Conflict with existing small business
Place Presentation Post: Disintermediation in DVD rental market
Introduction 1, 2

Team Post#3:Example of the expansion.

Here's a story of Walmart in my counry. When Walmart first came into SouthKorea(1998), there were already a huge megastore chains(E-Mart) that have some years of experience. It was challenging to Walmart, but Walmart didn't consider it that much. Now, Walmart has 16 stores in SoughKorea, whereas E-Maart has 74 stores with 1/7 annual sales of E-Mart(5.6bil dollors)
Experts analysis point out some factors Walmart should have known.
(1)Korean customers prefer bright and fancy store(atmosphere and service)
(2)They prefer a near store from home(E-Mart is located in the dountown)
(3)even in price, Walmart doesn't have advantage
and unfortunately, there was a supermarket that had registered "Walmart" as theirs, so Walmart should open their shop with another name(Macro)
For Walmart, it must be a lesson that they should study more before expand distribution.

Team Post#2: Technical viewpoint

Finding some information about logistics, I found out how Walmart is developed in logistics strategies. For me, as an engineer, the most interesting one is technical solution. From controlling inventory and transportation with satellite from 1987, to lately being about to apply RFID to murchandise. To mention about RFID, as Sheila mentioned at her presentation, RFID could be used at studying customer behavior and market segmentation. Besides that, the technology provides faster, more-accurate information on inventory, which speeds store stocking.

Wal-mart's catchphrase-low price has been possible not only from underpaid labors(which is pointed out as a problem), but also from innovative investment for saving warehouse cost, quick transportation, and maintaining stock.

Here is a study of Wal-mart's chain management. It shows how do they use IT solution for logistics and inventory. To summarize it,
△ Distribution: Barcode with hand-held computer enable employees connect realtime database and keep inventory level. They also help workers find goods from the shelf and make accurate packaging of right goods, to right place.
△ Logistics: Calculate exact time that takes from distribution centers to retail stores. Avoid trucks arriving stores at the same time, and cross-docking to save time and cost of warehouse.
△ Inventory management: Satellite shows every flows of stores and distribution centers. POS helps keep stock levels and track items.

Team Post#1: Conflict with existing small business

Reading article about the controversy of Walmart in New York, I recognized fearful influencing power of sophisticated and well organized distribution system. The effects occured by building Walmart near the town are vary from collapse of small business to conflict between two states.
This competiton is fair in free market point of view, but it breaks exsisting market structure. By this 'constructive destruction', the economic improvement and the satisfaction of buyer would be attained, but the victims, small business owners, suffer from losing their customers and job. In response of these problem Walmart presented higher wage and 300 job openings, and won't have supermarket in their store.
Expanding can confront confrictions not only btween channel members inside the firm, but also between other channels outside the firm. Anticipating the reaction and handling of exsisting market channel is also needed when Walmart expand themselves to other countries. I'll study more about other example of confliction in other place.

Place Presentation Post: Disintermediation in DVD rental market

DVD rental company Blockbuster has some competitors in its DVD rental business. When Netflix started their mail rental service, Blockbuster didn't consider it as a big deal. In 2004, Blockbuster began DVD-by-mail to get their customers back. With $19.95 which is now lowered to $14.99 a month due to the harsh competitioin, movie lovers can watch as much as they want, no late fee, no due date, only with maximun 3 titles limitation at once.
Since Blockbuster had concentrated their distribution on only offline with about 9,100company-owned or franchised stores in 25 countries (about 65% are in theUS), Netflix penetrateed through the niche that Blockbuster couldn't reach, online. Now, 3 million subscribers with 34 distribution centers and 40,000 movie titles, Netflix is taking over extra subscirbers from Walmart's giving up DVD rental by partnership agreement(Walmart has 200,000 subscribers with 14 distribution centers and 16,000 movie titles).

Blocbuster's this disintermediation is an attempt to contact to more customer and it reflected customer's needs that are easy to access and return, and they might mave no choice but to response to considerable online market. In the textbook, the author said,(p.406) "Disintermediation presents problems nd opportunities for both producers and intermediaries. To avoid being swept aside, traditional intermediaries must find new wats to add value in the supply chain..()..However, developing these new channels often brings them into direct competition with their established channels, resulting in conflict. To ease this poblem, companies often look for ways to make going direct a plus for both the company and its channel parteners." To relieve a conflict, Blockbuster offers free rentals and special price at in-store to online subscribers. With this promotion, more people will visit offline stores, but it does not look clear if that promotion would really help offline franchisers, with taking away many customers to online.
The cost is another concern. The online system need investment, and personal working is subsituted by computer. And also, change of charging policy might not make that much profit because of no late fee and mailing fee to deliver(They are testing raising monthly fee to $17.99.) The thing is, there seems to be no competitive advantage but price. Textbook mentioned a condition of the disintermediation. "Disintermediation works only when a new channel form succeeds in bringing greater value to consumers."

"We remain committed to growing our online rental business and plan to continue to compete very aggressively in this space," said John ntioco, Blockbuster Chairman and CEO. "Just seven months after launching BLOCKBUSTER Online, we had more than 750,000 subscribers and we remain focused on reaching our goal of two million online subscribers by the end of the first quarter of 2006."